Crude oil prices flared up on Monday, hitting their best levels in four months, after the drone attacks on Saudi oil facilities resulted in a loss of about 5% of global crude output.
The commodity also recorded its biggest single-session intraday gain in nearly 20 years.
West Texas Intermediate crude oil futures for October ended up $8.05, or 14.7%, at $62.90 a barrel, after vaulting to a high of $63.38.
On Friday, WTI crude oil futures for October ended down $0.24, or 0.4%, at $54.85 a barrel, extending losses to a fourth straight session.
The steep climb of the oil today was due to the attacks on an oil processing facility at Abqaiq and the nearby Khurais oil field cutting Saudi Arabia’s daily crude oil output in half.
Oil futures regained a bit of lost ground after reports suggested Saudi Arabia, the world’s top oil exporter, will restore at least a third of the production lost to weekend attacks on two major oil facilities.
U.S. President Donald Trump said he has authorized the release of oil from the Strategic Petroleum Reserve if necessary to keep the markets well supplied.
Trump also tweeted the U.S. is “locked and loaded” to the respond to the attacks, with Secretary of State Mike Pompeo pointing the finger at Iran.
Yemen’s Houthi rebels have reportedly claimed responsibility for the attacks.
Meanwhile, a report released by the Energy Information Administration today said crude oil production from seven major U.S. shale plays is forecast to climb by 74,000 barrels a day in October to 8.843 million barrels a day.
The material has been provided by InstaForex Company – www.instaforex.com